There are some basic yet very effective rules that you can follow for avoiding credit card debt, and it’s important that you know what they are. These rules can help you avoid years of frustration and financial disaster, so you will want to take them seriously. Each year millions of people go into credit card debt because they didn’t take these things into consideration before using their plastic.
Establish a Budget and Follow it strictly
The very first thing that you will need to do is to establish a budget so you know exactly how much money you can afford to spend each month. It is crucial that you follow this budget exactly so that you don’t go over and into debt. One of the biggest mistakes that people who get saddled with credit card debt make is to not write out a budget for themselves and actually follow it. Remember, establishing a budget for yourself isn’t going to do any good if you don’t abide by it.
Charge only what you can afford
You will also need to remember that you should only ever charge what you can afford to your credit card. You may want that new flat screen TV or pair of shoes, but if you cannot afford to charge it, don’t buy it at all. Think to yourself whether or not you are going to have trouble paying the balance of your card at the end of the month before putting anything on your card. Those who take the time to do this will be able to avoid a financial nightmare later on.
Avoid unnecessary balance transfers
You will also want to make a point of avoiding unnecessary balance transfers. Whatever you do, don’t transfer balances from one card to another just so you can avoid due dates. If you do decide to do this, make sure you have a valid reason for doing so. Sometimes you can get a lower interest rate by doing this, which can be highly beneficial. But if you do this just to avoid a due date, your balance will just increase because of the transfer fee you incur.
Do not miss your payments
Perhaps the most effective way to avoid going into credit card debt is to avoid being late on your payments altogether. Always make sure that you pay off your credit card on time, because otherwise you will quickly and easily slip into a deep pit of debt that can be very difficult to get out of. Most people who are deep in debt didn’t think that missing one small payment was a big until, it became one. By making your payments on time you will be able to keep yourself out of debt.
Pay your Full Balance each month
You should always make a point of paying the full balance of your credit card each month. Whatever you do, don’t get into the habit of making minimum payments. By clearing the entire balance of your card at the end of each month, you won’t have to worry about getting behind because of accumulating interest. When you do this you will never need to worry about whether or not your credit card has been paid in full.
Recognize the Signs of Credit Card Debt
It is crucial that you recognize some of the initial signs of credit card debt so that you know if you are on your way there. If you are unable to pay the full balance of your card, you are well on your way to debt. By recognizing these signs early on, you will be able to avoid a complete financial disaster later.
Stay away from Cash Advances
While you might think that a cash advance in a good idea at the time, you will most likely regret your decision later on. It is important that you make a point of not taking out cash advances if you can help it, because you will incur some pretty hefty fees. Withdrawing money from your credit card is an effective way to get yourself into debt.
Understand the Terms of your Card
You will need to look over and fully understand all the terms and conditions of your credit card, because this information will help you stay out of debt. It is important to keep in mind that credit cards all have different terms, so you will therefore need to know what the terms of yours are before you use it at all. You should also know what the features of your credit card are, because they will help you to understand how using it can actually end up costing you more in the end. The more of this information you get, the more likely you will be to stay out of debt.